The Patriot Post® · Biden ESG Rule Under Bipartisan Fire
We’ll say this about Joe Biden: He knows how to unite us. Against him.
Back in November, during Thanksgiving week, the wokesters within Team Biden’s Labor Department put the finishing touches on an obscure rule with potentially devastating consequences. Congress has finally taken notice.
The rule in question allows — some would say encourages — retirement planners to invest your hard-earned contributions not in a way most likely to yield superior financial performance, but in a way most likely to promote the Left’s environmental, social, and governance (ESG) standards. Such thinking, it’s safe to say, would’ve kept a portfolio manager from taking advantage of the strong performance had by fossil fuels this past year when so many other industries suffered under Bidenomics.
In short, the Biden administration has put your retirement savings at the mercy of the hard-left’s ESG-driven political agenda.
And you thought those blowhards over in Davos were more interested in hot air and hookers than your humble 401(k).
“The Labor Department,” as The Wall Street Journal reported at the time, “casts its rule as a mere clarification of the 1974 Employee Retirement Income Security Act (ERISA), which requires that retirement plan sponsors act ‘solely in the interest’ of participants and beneficiaries.”
A Trump administration Labor rule had barred retirement managers from considering investment factors that weren’t tied directly to financial performance. And rightly so. How, for example, are investments that prioritize “climate change” and “diversity, equity, and inclusion” aimed at single-mindedly growing our retirement accounts? Answer: They aren’t. They’re aimed at furthering the Left’s agenda. Which means you might have to increase your retirement contributions to make up the performance shortfall. Or retire later.
The Biden DOL says the Trump rule created a “chilling effect” on such ESG investing, and its new rule replacement “gives plan sponsors nearly unlimited discretion and legal protection to invest based on these often political considerations.”
Enter Congress. As Fox News reports, “Every Republican senator and Democrat Joe Manchin are introducing legislation that they hope will terminate the Biden administration’s new environment, social and governance (ESG) rule, which they say ‘politicizes’ the retirement savings for 152 million Americans.”
The bipartisan disapproval resolution is being led by Indiana Senator Mike Braun, and a companion bill in the House will be introduced by Kentucky Congressman Andy Barr. If both houses pass the resolution, it’ll allow Congress to overrule the Biden rule and kill the regulation.
“President Biden,” said Braun, “is jeopardizing retirement savings for millions of Americans for a political agenda. In a time when Americans’ 401(k)s have already taken such a hit due to market downturns and record high inflation, the last thing we should do is encourage fiduciaries to make decisions with a lower rate of return for purely ideological reasons. That’s why we are proud to stand up against this rule for the millions of Americans who depend on these funds for their retirement.”
Manchin, the aforementioned West Virginia Democrat, struck a nearly identical tone: “At a time when our country is already facing economic uncertainty, record inflation and increasing energy costs, it is irresponsible of the Biden Administration to jeopardize retirement savings for more than 150 million Americans for purely political purposes.”
There’s been an awakening of late to the scourge of ESG, which Elon Musk characterized as a “scam” back in May. “It has been weaponized by phony social justice warriors,” Musk said.
At its core, ESG is about wealth redistribution — a leveling of the economic playing field by moving away from the extraordinarily effective wealth-production model of shareholder capitalism toward a so-called “stakeholder capitalism” model, which turns decent countries into socialist dystopias.
The good news, though, is that folks are waking up to it.